The latest Beige Book is moderately positive with eleven of twelve Fed Districts reporting improved growth in recent weeks. Manufacturing continued to expand at a steady pace with many Districts reporting increases in new orders, shipments, or production and several Districts indicating gains in capital spending, especially in auto-related industries. Retail sales were up in most Districts on a year-ago basis although mild winter weather hurt seasonal sales somewhat. Auto sales were mixed by District.
Residential real estate activity increased modestly in most Districts. Commercial real estate was positive in some Districts but unchanged in others. Hiring increased slightly across several Districts, and contacts in a variety of industries faced difficulties finding skilled workers. Wage pressures were generally contained, and prices of final goods remained stable.
Overall, the latest Beige Book is favorable toward a recovery that is slowly gaining traction. However, as Fed Chairman Ben Bernanke noted earlier today in Congressional testimony, the economy is still growing relatively slowly compared to potential. On the news, equities improved somewhat.